New reactors on verge of final OK

[n2doc]

By Kristi E. Swartz

The Atlanta Journal-Constitution

Federal regulators are expected to sign off in the next few weeks on the United States’ first new nuclear power reactors in three decades, a $14 billion project near Augusta.

But the move by Atlanta-based Southern Co. and its Georgia Power subsidiary to build two new reactors at Plant Vogtle, in Burke County, may not have happened without financial cushions provided by consumers and taxpayers.

One cushion comes from the federal government, which is promoting U.S. energy independence as well as cleaner options. Taxpayers are guaranteeing more than $8 billion in loans for the Vogtle project.

The other cushion comes from the 2.4 million Georgia Power customers. Unlike the nuclear construction boom in the 1970s when reactors were built and then consumers paid for them, Georgia Power customers are already footing the bill for the Vogtle project — even though it hasn’t received final approval yet.

Both developments transfer financial risk away from Southern Co. and its shareholders and toward consumers and taxpayers. If there are cost overruns — as there were when Vogtle was originally built — customers will largely be on the hook.

more
http://www.ajc.com/news/new-reactors-on-verge-1321239.html

[LiberalEsto]

1. But will they be insured?

Isn't the biggest obstacle to nuke plants the cost of insurance coverage?

One can only hope.

[PamW]

2. WRONG!!

Isn't the biggest obstacle to nuke plants the cost of insurance coverage?
=========================

NOPE - you've been reading LIES from the anti-nuke websites.

Another OUTRIGHT LIE that they like to tell is that there are no insurance companies
that are willing to insure nuclear power plants.

That is WRONG!! Here's the website of a consortium of commercial insurance
companies that provide insurance for nuclear power plants:

American Nuclear Insurers

http://www.amnucins.com/

American Nuclear Insurers (ANI) is a joint underwriting association created by some of the largest insurance companies in the United States. Our purpose is to pool the financial assets pledged by our member companies to provide the significant amount of property and liability insurance required for nuclear power plants and related facilities throughout the world.

There ARE insurance companies that are willing to insure nuclear power plants, and
the power plants have to buy this insurance as a condition of their operating license.

Even from the beginning of nuclear power back in the '50s, there were those that wanted to
kill the industry by requiring excessive amount of insurance in order to price nuclear power
out of the market. It's like requiring everyone to have a BILLION dollars of liability insurance
instead of $300,000 or what ever in order to drive a car. (There are probably a few who would
like to make that the law so that we only have a few cars on the road.)

But when Congress wrote the Price-Anderson Act in the mid '50s, they asked the Atomic Energy
Commission how bad a nuclear accident could be. The AEC asked the scientists at Brookhaven
National Lab to calculate the worst possible accident. Brookhaven did that. They even assumed
that the reactor didn't have ANY containment building in spite of the fact that containment buildings
have ALWAYS been required on commercial nuclear power plants.

The figure that Brookhaven calculated has been the requirement from the beginning, and has been
ratcheted up over the years to keep pace with inflation. That is the amount that commercial power
plants are required to buy in insurance from commercial underwriters; and they do that.

Above that, if there were an accident that exceeded the calculation of the Brookhaven scientists, then
the federal Government steps in with an additional level of protection. What the anti-nukes don't tell
you is that the US Government collects any money expended from the nuclear utilities all pooling their
assets. Instead the anti-nukes call this a "subsidy" and claim the taxpayer is on the hook. They don't
like to mention that the money if collected from the nuclear industry. Go read about the "Price - Anderson Act" on Wikipedia:

http://en.wikipedia.org/wiki/Price%E2%80%93Anderson_Nuclear_Industries_Indemnity_Act

When the anti-nukes say that the nuclear industry can't afford the insurance; they mean they can't
afford the insurance that the anti-nukes would like to require which is enough to run them out of business.
It's like requiring $1 Billion in insurance for a car. Can a car do $1 Billion in damage? NOPE. It's just a figure to require that anyone short of Bill Gates or Warren Buffet can't afford to drive.

Additionally, you can't buy insurance above the amount of harm that you can cause. If you called up
State Farm and asked to buy $1 Billion liability insurance on your car, they wouldn't sell that much,
because cars can't do $1 Billion in damages. If there were anti-cars like there are anti-nukes, they
would then claim there's no insurance company willing to sell auto insurance. NO! There are companies
that are willing to sell policies at reasonable amounts, there just aren't companies willing to sell policies
at amounts unrelated to the maximum amount of damage.

PamW

[bananas]

5. They couldn't get insurance so the government limited their liability.

Privatizing the profits while socializing the risk.

[PamW]

11. WRONG AS ALWAYS!!

As always you don't know the history of nuclear power, and you spout only the
"accepted" anti-nuclear view.

In actuality, the insurance industry was willing to insure nuclear power plants, but ONLY
up to the limit that was calculated by scientists at Brookhaven National Laboratory in
the "worst possible accident" assessment.

Even in the '50s, there were those who wanted to squelch nuclear power that were claiming
that nuclear power plants had to be insured to levels far in excess of what the insurance
industry was willing to; which were the levels of the Brookhaven study.

The anti-nukes said that in order for the public to be protected, that the levels had to be
to the levels they specified. So Price and Anderson essentially called their bluff. They
devised a way so that the public would be protected to much higher levels than what the
scientists at Brookhaven calculated to be the worst possible; but they would do it in a
way such that the industry was not crippled by excessive premiums, which was what the
anti-nukes wanted.

The anti-nukes couldn't admit that they were just attempting to kill the industry; so they
had to go with the scheme that Price and Anderson came up with. It would have been
hypocritical to do otherwise and expose their true agenda.

That gave us the system we have today with the Price-Anderson Act; and a multi-tier
insurance protocol that is funded by the nuclear industry.

PamW

[wtmusic]

15. Environmental risk is a social concern.

Who gets the profits when you buy a tankful of gas?

Why should your neighbors have to breathe the smoke from your car?

[PamW]

3. Actually it depends...

Actually it depends on WHY there are over runs.

If the over run is NOT the fault of the company, then even without the recent law,
the ratepayers are on the hook for the amount.

For example, if the cost is escalated because anti-nukes went to Court and tied up
the operation of the plant for a decade like happened with Diablo Canyon; then that
is a legitimate business expense, and the customers are on the hook for that, and
have always been.

The problem with getting utilities to invest in nuclear is due to the experience of
Long Island Lighting and the Shoreham plant. LILCO built the plant, and the NRC
was ready to license it. However, back in the mid-80s, New York had an anti-nuke
Governor in Mario Cuomo. He packed the Public Utility Commission with anti-nukes.
LILCO had to ask the State how much it could charge for Shoreham electricity. The
New York PUC said they could charge $0.00 / kw-hour. The PUC said they could give
the power away free, but they couldn't charge for it. So LILCO had a power plant
that couldn't earn any money, and LILCO borrowed the money to build the plant, and
had no way of paying it back. So LILCO was forced to declare bankruptcy.

The anti-nukes found a VERY POWERFUL weapon against nuclear power.

Because the Governor and PUC can essentially force a company to go bankrupt even
though they've done nothing wrong - other than successfully building a nuclear power plant;
that has many utility executives wondering whether to "bet the company" on building a nuke.

That is what the federal guarantee is about. President Obama awarded a guarantee to
Vogtle a couple years ago. If Southern Co builds the new Vogtle units, and the State
of Georgia does to Vogtle what New York did to Shoreham; then Southern Co would be
reimbursed from the funds of the guarantee that Obama awarded to them.

http://chronicle.augusta.com/news/government/2010-02-16/feds-back-two-new-reactors-plant-vogtle

Rather than cosign the loan, I think the Congress should FORBID states from treating a nuclear
plant any different than a fossil or solar or wind plant.

In the past few weeks, Judge Murtha in Vermont ruled that the Vermont legislature was trampling on
an issue reserved to the Federal Government in the Vermont Yankee case.

It would be within Congress' purview to order that States can not treat nuclear plants any different
than coal or gas plants. If New York says a gas-fired electric power plant can charge $0.11 / kw-hour,
then they have to treat the Shoreham nuclear plant the SAME and not cap the charge at $0.00

The approval that Vogtle has been awaiting is the NRC cetification of the Westinghouse AP1000 design
which is what the new Vogtle unit 3 and 4 reactors will be. The NRC just recently GRANTED that approval:

Approval of Reactor Design Clears Path for New Plants

http://www.nytimes.com/2011/12/23/business/energy-environment/nrc-clears-way-for-new-nuclear-plant-construction.html

PamW

[LiberalEsto]

10. "any different than a fossil or solar or wind plant"

As evidenced by the disaster in Fukushima, the potential for harm in a nuke plant is exponentially greater than any harm that might be caused by a fossil, solar or wind plant.

Not only that, but the harm that could be caused by a nuclear plant accident can affect many more people, destroy more of the environment, and LAST thousands of years longer.

[PamW]

12. That's NOT the States concern

That's NOT the States concern.

What you are raising is a SAFETY issue; which is TOTALLY the purview of the
FEDERAL Government. It's not that there won't be any lack of oversight of the
nuclear industry. However, it will be done by the FEDERAL Government which is
what the Atomic Energy Act of 1954 and the Energy Reorganization Act of 1974
establish.

As Judge Murtha just ruled in Vermont, a State is PRE-EMPTED from considering the
safety aspect. That is for ONLY the Federal Government.

So you just helped prove my point. The issue you raise is TOTALLY within the purview
of the Federal Government and the State can't consider that when they are regulating
the power plant.

The laws that establish Public Utility Commissions are ONLY to be sure that the consumer
is treated fairly when we have a regulated monopoly like a utility. The PUC laws are NEVER
to be used to discriminate between types of power plants. That's NOT what those laws
authorize.

If 11 cent / kw-hour is good enough for a gas-fired plant for a State, then 11 cents / kw-hour
is what they should authorize a nuclear plant to charge for the IDENTICAL product.

The issues of safety the State MUST defer to the Federal Government because the safety
issue is PRE-EMPTED by the Atomic Energy Act of 1954. That's why Vermont's legislature
has just been enjoined by the Federal Court from doing what they planned.

PamW

[bananas]

4. Nuclear Loan Guarantees Aren’t Just Guarantees: They are Actual Taxpayer Loans

Kristopher was right: he said that even with the
loan guarantees, they wouldn't find any takers,
and they didn't:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=115x231521

[Dead_Parrot]

6. So, the interest goes to the taxpayer, rather that a bank exec's bonus?

Ooh, evil socialism.

[bananas]

7. No, the loan defaults, the plant gets sold for pennies on the dollar, and

and the bank execs get a huge bonus anyway.

[Dead_Parrot]

8. Wait, is this another Solyndra thread?

[PamW]

13. WRONG AS ALWAYS!!

WRONG AGAIN!!

You can easily read the provisions of the 2005 law that created those guarantees.

The Federal Government is, in essence, CO-SIGNING the loan.

NO federal money is expended up front. The ONLY time federal funds are used is if
the primary borrower, the utility, defaults.

Did you ever co-sign a loan for a son or daughter? Does the co-signer have to put
up any money up front? NO!!! The ONLY reason for the co-signer is to give the
lender additional security because they can go after the parents if the son or daughter
defaults, and that makes the loan more palatable for the lender. The co-signer doesn't
put any money on the table up front. The co-signer just lends his / her good credit to
the deal.

Likewise, as you can read in the law, or has been explained in the papers; the Government
only pays if the utility defaults.

PamW

[bananas]

16. WRONG AS ALWAYS!! The loans are from the Federal Financing Bank

<snip>

The Federal Financing Bank (FFB) is a little-
known government entity that more typically
makes loans to universities, colleges, rural
electric co-ops and other small-scale projects.
Interest rates from the FFB may be lower than
offered by private financial institutions. Use of
the FFB means that the loans themselves for
new reactor construction will come from
taxpayers, putting taxpayers in the risky
business of both providing the loans and
guaranteeing to themselves that the loans will
be repaid.

<snip>

“This is not like Dad co-signing a loan for a
child’s first car,” said Michael Mariotte,
executive director of Nuclear Information and
Resource Service. “The idea that these are just
loan “guarantees” is fictitious: these are actual
loans. Giant nuclear utilities will be raiding the
federal treasury for money to build reactors,
and they are expecting the taxpayers to bail
them out if the project goes bad.”

“Coupled with Secretary Chu’s astonishing
admission yesterday that he was unaware of the
Congressional Budget Office report estimating a
50% failure rate for new reactor projects, the
administration has chosen a path of enormous
risk to taxpayers and is obscuring the real nature
of that risk,” said Mariotte.

[PamW]

17. WRONG WRONG WRONG!!!

For Heavens sake, why do you "think" that quoting an anti-nuclear group like NIRS or one of their spokesmen is somehow "authoritative".

When are you going to learn that they LIE to support their own positions. Just like NIRS LIES when they say that there are no insurance companies that will insure nuclear power plants, and I just pointed to a consortium that does:

American Nuclear Insurers

http://www.amnucins.com/

American Nuclear Insurers (ANI) is a joint underwriting association created by some of the largest insurance companies in the United States. Our purpose is to pool the financial assets pledged by our member companies to provide the significant amount of property and liability insurance required for nuclear power plants and related facilities throughout the world.

Likewise, if you want a truly authoritative reference on the provisions of the nuclear power loan guarantee program; the only real authoritative reference is the law that created it - the Energy Policy Act of 2005 ( Public Law 109-58 ):

http://www.gpo.gov/fdsys/pkg/PLAW-109publ58/pdf/PLAW-109publ58.pdf

The loan guarantee starts on page 525 - Title XVII - Section 1701 on.

The terms of when the Secretary of Energy has to pay out money on behalf of the taxpayers is cited in Section 1702, Paragraph (g)
DEFAULTS SubParagraph (1)(A):

(1)Payment by Secretary
(A) In general, if a borrower defaults ( as defined in regulations promulgated by the Secretary and specified in the guarantee contract )...


See that clause that states "if a borrower defaults". This is known as a "conditional phrase". It means that the subsequent verbiage is only active when a certain condition is met. In this case, the Secretary pays out money on behalf of the taxpayer, if a borrower defaults.

Therefore, contrary to the claims of your self-servicing source; the guarantee really is like co-signing a loan; the Secretary of Energy pays out money under a certain condition namey, "if a borrower defaults".

PamW

[Fledermaus]

9. Money Pit

14 billion now... How much by the time its done?

[PamW]

14. The rules have changd

14 billion now... How much by the time its done?
========================================

Should not be appreciably more since the rules have changed.

What drove the price up before was that the anti-nukes could block the operation of
the completed plant with lawsuits.

Under the USA's old rules for licensing, the utility first got a construction permit, probably
having to fight the anti-nukes in Court to do so; and then it could build the plant.

During the building of the plant, the utility accesses the construction loan, so the clock is
ticking on the interest it owes on the money. When the plant has been completed, the
utility had to apply for an "operating license". That was another federal decision that
could be challenged in the Courts. So when the utility had expended the proceeds of the
loan in building the plant, it couldn't operate the plant because it didn't have a license. It
had to fight another round in the Courts, which could take many years if not more than a
decade. All along, they just added the carrying charges to the loan; which is why the
costs spiraled.

A few years ago, Congress changed the licensing provisions. Now a utility gets a "Combined
Construction / Operating License" or CCOL. Essentially, the NRC gives the utility a license to
operate the plant when it gives the license to construct - they are ONE and the SAME.

So when the utility fights in Court with the anti-nukes; it is over this combined license.

When the utility prevails, and builds the plant, as soon as the NRC certifies that the plant was
built to spec; the utility can begin to operate it because they are already licensed. They don't
have to go back to the Government to get permission.

Additionally it means the anti-nukes can't go to Court; because the Court already decided the
issue for the combined license; and the Courts don't let you attempt to rehash something that
they've already decided on. You get your day in trial court, and you appeal it as far as you can.
However, once the Courts have ruled against you, the decision stands.

Additionally, even if the anti-nukes attempted to file; the utility HAS an operating license and
can fire up the plant, make money, and pay off the loan. Under the new law, the anti-nukes
don't have the power they once had in the Courts. Congress clipped their wings.

PamW

[txlibdem]

18. Cost overruns would be a good DISincentive to anti-nuker activists litigation

since the only people they are hurting would be the ratepayers and the taxpayers.

But then the ratepayers and taxpayers are hurt any time a nuclear power plant is stopped -- because two or three coal fired power plants go up instead. Burning coal has been shown by the World Health Organization to kill 2 million people each year.

But they don't care about that. They just want to be zealots and fight for their petty little cause. Never mind that they have cost the lives of nearly 60 million people so far by helping the coal lobbyists get coal fired plants built everywhere. Never mind that the closed spent coal mines are leaking out tons of hydrofluoric acid and other acidic compounds into lakes and streams that feed into the Chatahoochie river, making hundreds of miles of streams deadly (too acidic) to ANY forms of life.

All some people care about is winning their little fight and to hell with the consequences for the health of our citizens. These people who have stopped nuclear power plants are DIRECTLY responsible for part of the devastation and DEATHS caused by Global Climate Change.

Be proud of yourselves. You've accomplished *so* much for the fossil fuels industry. Hooray for you.